Manufacturing squeeze hits Heinz factory

Australian manufacturing is being squeezed by a high dollar and low offshore labour costs and one of the latest victims is the Heinz tomato factory in the Goulburn Valley food bowl.

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CHRIS UHLMANN, PRESENTER: Well mining might be booming but Australian manufacturing is being squeezed by a high dollar and low off-shore labour costs.

One of the latest victims is the Heinz tomato factory in the Goulburn Valley food bowl.

Heinz plans to close the factory next month but the locals are fighting back, seeking to buy it and run it as model for other struggling country communities.

And as political editor, Heather Ewart reports they've got Government backing.

HEATHER EWART, REPORTER: The small town of Girgarre in Victoria's Goulburn Valley was shaken to the core when told its lifeblood, the Heinz Tomato processing factory would close in the New Year.

At least 150 jobs would go.

LES CAMERON, CO-OPERATIVE LEADER: ...Keeping Heinz going and making sure that there is a guaranteed supply from farmers on the way through to consumers is going to be crucial.

HEATHER EWART: So residents, workers and growers got together to protest, not quite sure what that would achieve but certain of the need to do something.

LES CAMERON: Most of the workers felt as though there was nowhere to go I think and probably most of us did too. We thought at least having a rally showed that we opposed what was going on.

HEATHER EWART: What was your feeling when it was announced that it was going to close?

KEN COVINGTON, HEINZ WORKER: Horror, disappointment and frustration, I suppose. A little bit of anger too. I believed I'd retire out of the Girgarre plant and that's sort of thrown all our plans into chaos really.

HEATHER EWART: Is this the little people taking on the big guys?

PETER RUSSELL-CLARKE, CO-OPERATIVE MARKETING MANAGER: Most certainly. Why not? Why not? Why are we all so frightened of standing up and doing something in Australia? It's about time we did our own little bit.

CO-OPERATIVE MEMBER: We can't trust Heinz at all.

HEATHER EWART: So they did all stand up, surprising themselves as much as anyone else when they decided they'd try to buy the factory from Heinz.

PETER RUSSELL-CLARKE: If we have to produce food for Australians in Australia.

LES CAMERON: I have every confidence in the people that we've got around this table. They want to do that and they're ready to do that.

HEATHER EWART: This community project has taken on a life of its own and they're thinking big, planning not just to take over the factory but also set up a training complex for process workers and offer tourist accommodation as well.

Do you realistically think you can pull this off?

LES CAMERON: Yes, and we're very surprised to be able to say yes I guess. If you'd asked us in September we would have said no but at the moment we have got $2 million promised by a white knight investor. We've got another million dollars that have been pledged by various people around the committee.

KEVIN SIMPSON, MAYOR CAMPASE SHIRE COUNCIL: It's a groundswell of community support for what is basically a good idea; to compete against the multinationals in a David and Goliath type battle.

So you know they like that aspect of it because they get a chance to have a crack at the big guys.

HEATHER EWART: At the home of former National Party leader Sir John "Black Jack" McEwen, always a fierce defender of local manufacturing, these residents, growers, workers and professionals hold regular planning meetings and think he'd be proud of their efforts.

It's no longer just about trying to save jobs but about saving a community.

KEN COVINGTON: We've all got families here, committed to sports clubs and you know sporting functions, schools. We want to work where our families are and use our skills that we've learnt at Heinz.

CATHERINE FRASER, SCHOOL PRINCIPAL: To see the children in the long term have jobs. I mean that's my, I guess my interest. To make sure there's jobs out there and a future for our students. It has given hope, yes, yes.

CO-OPERATIVE MEMBER: Connect the community with the actual production of the processing of the tomatoes.

HEATHER EWART: With momentum building, the local council has become heavily involved and so too has the State Government; both providing funds for a feasibility study.

KEVIN SIMPSON: Well you can see the drawings in the background here. They do look pretty flash. But anything is possible. People power can do it but part of our involvement in the process is to make sure that it's based on sound economic reasoning.

HEATHER EWART: How would it actually operate?

LES CAMERON: Well we believe that what we will do, it'll be different from Heinz. First of all we're not going to concentrate on the Coles and Woolworths market.

PETER RUSSELL-CLARKE: Because a lot of products that go through Coles and Woolworths and IGA and others are simply what the big supermarkets want to sell, not what the public want.

Australia's rural industry is on its knees.

HEATHER EWART: Their marketing manager, the original celebrity chef, Peter Russell Clarke, says it's time to think outside the square.

With the strong support of local growers, who also feel they haven't been getting a good deal from the multinationals, he's advocating a cooperative, selling different products that bypass the supermarket chains.

PETER RUSSELL-CLARKE: Your food company in Australia should be starting to make food with a Thai flavour or they should be making tomato sauce that the Muslims would like instead of making tomato sauce that the Poms made and the Americans made for hundreds of years and they haven't changed the recipe.

HEATHER EWART: Of course this all sounds very ambitious and Heinz claims the initial bid is too low. But the coop committee says there's a lot more work to do yet.

The Heinz factory is due to close its doors on January the 14th. If the locals here can pull off what once would have been the unthinkable and take it over to save their community, they see the project as a template and not just for the rest of the Goulburn Valley but for food production and processing areas with similar problems around Australia.

KEN COVINGTON: There's a lot of towns suffering and there's no guides on how to go through this so if we're able to go through the whole process, get the place up and running, it could mean a difference for Australia.

HEATHER EWART: It would certainly make all the difference for Girgarre. Tomorrow, locals gather for their annual Christmas party, hoping the New Year will bring good news.